Companies

After premium bikes, Hero MotoCorp actively eyeing low-cost segment

Roudra Bhattacharya New Delhi | Updated on March 13, 2012 Published on March 13, 2012

Mr Pawan Munjal, MD and CEO, Hero MotoCorp. — Kamal Narang

Plan is to cut prices to Rs 20,000-30,000 range, woo moped users





A year after dissolving its joint venture with Honda, Hero MotoCorp is actively looking at the low-cost bike segment. This is expected to help the company further consolidate its strong hold in the domestic mass biking segment.

Low-cost bikes are typically targeted at buyers who would like to scale up from mopeds. So, the plan is to reduce prices to the Rs 20,000 —30,000 range (now it starts at Rs 34,500 for Hero's CD Dawn).

“We believe that there is a very large mass of customers in that segment — at the bottom of the pyramid. We're working on trying to come up with something, but it's not easy with the way costs are going up. But, we will have something,” Mr Pawan Munjal, Managing Director and CEO of Hero MotoCorp told Business Line.

“We'll be looking at prices which are much lower than where we currently are, otherwise it makes no sense. The market is for people who don't have any (personal) transport at all.”

Product strategy

In its recently set up R&D facility and along with new technical partners — the US-based EBR, and a rumoured tie-up with Austrian power train expert AVL — the company is working on several new product strategies. Apart from larger engines for high-end models, downsizing engines below its current starting point of 100cc is also being looked at.

Hero's increased interest in the mass segment is underlined by the fact that 88 per cent of its 4.53 million two wheeler sales (April-December 2011) came from the up to 125cc segment.

As this segment represents 70 per cent of total domestic bike sales, Hero commands a 45 per cent market share overall.

“It's easy to make something like a moped, but does that serve your purpose. A moped is not as successful in this country since it is not rugged and sturdy as per the usage our consumers — the kind of loading patterns and driving habits. We have to have a real motorcycle,” Mr Munjal said.

Industry sources said Hero had been eyeing this segment for the past few years but had been constrained from developing new technologies under the terms of its 27-year-old joint venture agreement with Honda.

That partnership formally ended in March last year, paving the way for Hero to set up its own research and development facility and seek fresh alliances.

roudra.b@thehindu.co.in

Published on March 13, 2012

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.